By Leslee Kulba- Asheville City Council approved a loan modification for Eagle Market Place, LLC. The city had taken out a Section 108 HUD loan in 2004 and disbursed $268,000 of a total $718,000 committed to the entity now known as EMP in 2013.
The city at the time did not agree to any terms for the balance, so staff was now proposing that EMP should have to create 21 jobs in five years while renting business space at 20% below market for the first five years and 15% below market for the following fifteen years. Council agreed to disburse the balance; and, in return, EMP would have the business space ready for occupancy within two years.
A budget amendment was required because the city repaid the HUD loan in 2017 to save $83,000 on interest. Since trying to get off the ground in 2004, the downtown revitalization project has changed hands, tried multiple financing structures, and even raised rents, reducing the amount of affordable housing that would be provided. The original objective was to create subsidized, low-income housing on prime real estate in the name of restitution for the local African-American community whose ancestors saw their neighborhood bulldozed in the early days of urban renewal.
According to previous coverage in the Tribune, by 2014, the project had received, “$7 million from the North Carolina Housing Finance Agency; $2.3 million in two loans from Buncombe County; and $5.9 million from the City of Asheville, $2 million of which was federal pass-through funds.” Mayor Esther Manheimer, said one of her first recollections of the project was when former Mayor Terry Bellamy called a meeting with local leaders and said she wanted Mountain Housing Opportunities to take control. Then, the foundation cracked. Among other benefactors, hotelier John McKibbon donated $1 million to address what had become $4 million in overruns on the $12 million project.
Councilor Keith Young asked why the developers wouldn’t drop rents 5% more below market. “If you don’t go out of your way to make this project as successful as possible, with anything else that goes on in that area, including what happens with South Charlotte Street, in itself helps destroy the fabric of what this area was.” Councilor Sheneika Smith concurred, saying the project at first was supposed to revitalize the neighborhood, but in recent years, the mission had drifted more toward just getting things done.
Stephanie Swepson-Twitty, who has been a principal with the project for a decade, attempted an elevator pitch on business, economics, and the importance of paying off the loan. Manheimer commended those involved with pulling off an amazing feat, and Councilor Vijay Kapoor advised his peers to be more strategic in the future before getting involved in projects with complex financing structures. “Thank you for coming down here for your millionth city council meeting,” quipped Manheimer.
Council also celebrated, with a unanimous vote, economic development incentives for Burial Beer. The brewer offered to increase the tax value of its property $1.8 million and create 17 living-wage jobs in return for tax breaks estimated at $3,842 annually for five years but not to exceed $30,000 total. This fiscal year, the city expects to disburse a total of $1,242,540 in economic development incentives and about $350,000 more for economic development administration.
Council was not so friendly to private developers wanting to spend their own money on infill development, job creation, and public infrastructure. One proposal for a hotel was rescheduled, and the other was denied. An RB Hotel planned for Fairview Road by Biltmore Village would have footed the bill for a lot of transportation infrastructure the city demands.
But Councilor Julie Mayfield was opposed. She talked repeatedly about the kind of development “we want,” without specifying who “we” were. Mayfield suggested building on top of the surface parking proposed, or maybe getting enough neighbors to sell and aggregating parcels for a larger project. Presenter Jessica Bernstein explained staff only evaluates plans developers put before them to see they are appropriate. “I still don’t know the answer to the question of how we get the development we want if we don’t start asking for it,” said Mayfield.
Kapoor moved to deny the proposal due to hotel proliferation, since seven hotels were already built or in the works for the area.
He said he was being consistent, having previously denied a tenth hotel by the airport. Another problem Kapoor had was traffic. While the applicants celebrated changes the hotel would make to improve drivability at seven intersections, Kapoor said the intersection that mattered, Sweeten Creek and Hendersonville Road, had not been evaluated. He said he drives that way every day and starting at 3pm, travelers must wait four to five cycles at the traffic signals. Vice Mayor Gwen Wisler cast the lone vote in support of the hotel.